Khazanah Nasional to embark on Transformation 2.0

KUALA LUMPUR: Khazanah Nasional Bhd, which saw strong earnings growth of 84.7% in 2017, is embarking on a five-year Transformation 2.0 Programme to bring the investment fund to greater heights.

This follows the completion of its 10-year Government-Linked Company (GLC) Transformation Programme in 2015.

Speaking at a press conference here today in conjunction with the release of the Khazanah Nasional Annual Review, managing director Tan Sri Azman Mokhtar (pix) said Transformation 2.0 will pave the way for the investment fund to undertake more transformative transactions in the wake of the fast-changing landscape.

“As you know we’ve done many deals and deals are always on the cards, but we’re also constantly looking at transformative transactions.”

Interestingly, Khazanah has been exploring opportunities in the Blockchain segment, which is the underlying technology behind many cryptocurrencies.

“It’s a game changer. We’ve been looking at certain areas, but we did not make any investment,” said deputy managing director Tengku Azmil Zahruddin. “At the right time, it’s something we’ll consider.”

However, Azman stressed that Khazanah has never invested in digital currencies.

The Transformation 2.0 Programme, which will adopt innovation, disruption and entrepreneurship in company cultures, aims to achieve total shareholders’ return of 11% a year, in line with the previous performance.

Khazanah reported an 84.7% leap in profit before tax to RM2.89 billion in 2017 from RM1.57 billion in 2016, driven mainly by contributions from core companies as well as investments in China, including Alibaba.

Portfolio net worth adjusted soared 13.2% to a record high of RM115.6 billion in 2017, while realisable asset value was up 8.2% to RM157.2 billion.
With the better results, Khazanah declared a higher dividend of RM1 billion in 2017 against RM650 million in 2016.

Last year, Khazanah undertook 14 new investments last year totalling RM6.3 billion as well as 12 divestments that gave RM6.4 billion in proceeds and gains on divestments of RM2.5 billion.

Commenting on Khazanah’s prospects in 2018, Azman expects a continued steady growth in its portfolio, barring any major market changes. “We’ve stress tested our portfolio, it can take the volatility in downside.”

Speaking of a succession plan, Azman, whose contract expires at end-May 2019, said he has no final say as the candidate will be decided by the board with the approval of the prime minister. “It’s premature to tell, I’ll address this next year.”

However, Azman said the sucession plan has been underway with the appointment of two deputy managing directors – Ahmad Zulqarnain Onn and Tengku Azmil Zahruddin.

Asked if he was thinking of a contract extension, Azman said: “I don’t think too much, not overstay or understay”.